CHAPTER 1: INTRODUCTION
1.1. Research Background
It appears that many governments are used to lionizations of the small businessman. For example, the Indonesian government has enacted Law 80 2010 to promote the small
business performance. Various government agencies in Malaysia acknowledge the strategic trust for SMEs Ahmad et al, 2010, while Thailand government manage to enhance the
performance of SMEs on account of a major labor force Nakhata, 2010. Balbir and Venkataramay 2010 outline lesson learn from India and Singapore to other Southeast Asia
countries, especially Indonesia where SME has gained legitimacy as a prescription to achieve economic goals.
Policy with favor on SME becomes popular during global financial crisis with especially to foster economic growth and run up against unemployment. In the South Korean,
such policy aims to respond Chinas revelation Dianhua and Douxuan, 2012. The European Union is also funding SME in 27 state members to respond financial crisis Oncioiu, 2012,
while US social policy tries to promote new small business ventures Chester and Gregory, 2011. Job creation has become major reasons for such policies to run up against with global
economic crisis.
A number of researches offer evident the important role of SME to create more jobs. Zhao 2012 points out that formal SMEs in high-income countries provide 70 jobs, while
three out of four companies in emerging market is small enterprises with millions of job creation. Shane 2012 notes that US small enterprises provided 2.6 million jobs during the
economic recovery in 2008. In Southeast Asia, SMEs has been playing pivotal role to deal with unemployment since the economic crisis of 1997 Balbir and Venkataramay, 2010;
Nakhata, 2010. Neumark et al. 2008 also offer evident that small businesses create more jobs than larger one, then, come with question of sustainability and expansion. However, this
doesn’t mean that the growth of small enterprises is promising.
Along with increasing environmental turbulence, the small business arena gets in a chronic state of flux. Moreover, there is a widening gap between market complexity and
capacity of most marketing organization to deal with this complexity Day, 2011. Rubera Kirca 2012 indicate lack of the mediating role from the internal factors, such as
formalization, centralization, cross-functional integration, organizational commitment, and
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